banking union

ECB Offers Opinion on Proposed Regulation to Establish a European Deposit Insurance Scheme

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On April 20, 2016, the European Central Bank (ECB) published an opinion on a proposal for a regulation amending Regulation (EU) No. 8.6/2014 in order to establish a European Deposit Insurance Scheme (EDIS).

The ECB notes that an EDIS is a necessary third pillar to complete the Banking Union, having established a Single Supervisory Mechanism and the Single Resolution Mechanism and overall welcomes the system proposed. However, the opinion notes risks in terms of scope and governance of the scheme.

The opinion appends a technical working document containing drafting proposals as proposed amendments to the text released by the European Commission.

ECOFIN Discusses Banking Union, CRD IV and RRD

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On July 10, the European Economic and Financial Affairs Committee (“ECOFIN”) considered the progress and timings in relation to the work on the banking union, CRD IV and the proposed Recovery and Resolution Directive (“RRD”). The Council of the EU published a press release concerning the matters discussed at the meeting. Press Release.

The press release covers the following areas:

  • Banking Union: The President of the Council has been invited to assist with the development of a specific and time-bound work programme on the banking report.
  • CRD IV: At the meeting, it was explained that negotiations concerning the CRD IV Directive are almost finished, and attention has now turned to the Capital Requirements Regulation. There are several outstanding issues such as bankers’ remuneration, crisis sanctions and the powers to be given to the European Banking Authority.
  • RRD: The press release states that the Council aims to agree a general approach on the proposed RRD by December 2012.

European Commission President Calls for Banking Union

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José Manuel Barroso, president of the European Commission, commented in an interview with the FT this week that all 27 EU countries should submit their big banks to a single cross-border supervisor as part of a banking union. He said that the EU needs to take “a very big step” towards deeper integration if it is to learn lessons from the sovereign debt crisis. Mr Barroso thought that the changes, which would also include an EU-wide deposit guarantee scheme and a rescue fund paid for by levies on financial institutions, could be achieved in 2013 without changes to existing treaties.

The UK chancellor, George Osborne does not want Britain to be part of any banking union which would make taxpayers liable for recapitalising eurozone banks. However, he thinks that the union is desirable, so long as Britain is not obliged to take part. Mr. Barroso considered that it would be right to allow Britain to opt out of the banking union, so long as it did not block the union’s progress.

The Commission published a memorandum on the proposed banking union on 6 June 2012. Memorandum on banking union.